Philippine economy to withstand crisis

MANILA, Philippines–Eeconomic managers have built up enough buffers to ensure the country stays on its current growth path, or at the very least avoid major crises, amid several risks from overseas.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said low inflation and strong growth put the Philippines in a comfortable position despite dark clouds in other countries.

“Given the positive alignment between inflation and growth, and augmented government resources as a result of fiscal consolidation, both the monetary and financial sectors have sufficient room to make policy adjustments as may be warranted,” Tetangco said.

Speaking at a forum hosted by Euromoney magazine, Tetangco cited the main risks to the country’s economy, namely the uneven prospects of advanced economies and volatile fuel prices. As a result of these two issues, monetary policies across the world have moved in opposite directions, resulting in turbulence in financial markets.

Weak economic growth in Japan and Europe, for instance, has forced their central banks to ease monetary policies. The United States, meanwhile, has seen its economy improve. The US Federal Reserve is expected to raise rates for the first time since the 2008 crisis this June.

Contributing to this divergence is the recent collapse in fuel prices. Oil importers such as the Philippines see cheaper fuel as a boon that helps drive down inflation and keeps more money in consumers’ pockets.